5 comments to Cooperman hammers “ineffectual” Obama

I’m not surprised that you’re alarmed by the tone in Washington – I am too. I’m however very surprised that you blame Obama for that. The obstructionist behavior and nasty tone started with the Republicans and eventually Obama had to respond. Yes, ideally, Obama would lead us out of that but you need leadership on the Republican side ready and willing to participate. Unfortunately I see no sign of that.

Your open letter should have appealed to both Obama and Boehner to rise above the fray and truly make the tough decisions.

The Stench From MF Global Gets Worse – Should James Giddens (Bankruptcy Trustee) Recuse Himself?
I don’t know about anyone else, but I find it quite fascinating and intriguing that ultimately there is a direct connection from MF Global to Goldman Sachs that goes beyond the Jon Corzine connection. And there is a direct connection to MF Global, Corzine and the ability of the Government to cover up a lot of this mess via Gary Gensler, Corzine’s butt-buddy at Goldman Sachs and the Chairman of the CFTC, the regulatory body of the U.S. Government that was in charge of monitoring and regulating MF Global.http://truthingold.blogspot.com/2011/11/stench-from-mf-global-gets-worse-should.html

Public is fed up with 2 tier justice system.

COMFORTABLY NUMB
The oligarchy of moneyed interests have done a spectacular job
convincing the working middle class they should be angry at 20 year old
OWS protestors, illegal immigrants and the inner city welfare class,
rather than the true culprits – the Federal Reserve, Wall Street banks
and mega-corporations.

Wednesday, November 30, 2011
Hank Paulson: Goldman Sachs Guy
The more we know about Goldman Sachs’s Hank Paulson, the less we like what we learn. He was able to use his knowledge as Treasury Secretary to enrich his fellow Goldman guys and others. It is not a pretty picture: he is not an ethical man.http://www.goldmansachs666.com/2011/11/hank-paulson-goldman-sachs-guy.html

Eliot Spitzer: “In retrospect, I wish we had put more people in handcuffs.”
ELIOT SPITZER: There was an amazing piece of journalism that came out yesterday which analyzed the magnitude of the loans that have been made by the feds to the banks. The six big banks in particular got over $400 billion of secret loans, most of which we had not heard about. Now, at the time these banks were getting these loans, they were claiming to be in great financial shape. So why were the loans made? Is there a tension between the public statements being made by the CEO’s of the banks–
ELIOT SPITZER: The answer is no. And if you or I did that, if you or I went to a bank –
ELIOT SPITZER: Or made any public statement, knowing it to be false, we’d be in handcuffs. So the question I have is, look, we don’t know a lot of these facts. Let’s predicate — there are 100 uncertainties, but where is the inquiry right now about all the statements being made by the CEO’s, CFO’s none of which revealed these enormous loans.http://www.ritholtz.com/blog/2011/12/eliot-spitzer-more-people-in-handcuffs/?

This letter is getting a ton of attention. I agree with some of it, but I think Cooperman is missing something really important.

The real argument about the wealth divide isn’t, as he suggests, that rich people aren’t generous enough, or didn’t work hard… the argument is that the system is so out of balance that virtually all the wealth now flows to the top. And it didn’t just happen. It was deliberately engineered to produce giant returns for one particular industry.

This engineering is perfectly described by Steve Waldman:

Cash is not king in financial markets. Risk is. The government bailed out major banks by assuming the downside risk of major banks when those risks were very large, for minimal compensation. In particular, the government 1) offered regulatory forbearance and tolerated generous valuations; 2) lent to financial institutions at or near risk-free interest rates against sketchy collateral (directly or via guarantee); 3) purchased preferred shares at modest dividend rates under TARP; 4) publicly certified the banks with stress tests and stated “no new Lehmans”. By these actions, the state assumed substantially all of the downside risk of the banking system. The market value of this risk-assumption by the government was more than the entire value of the major banks to their “private shareholders”. On commercial terms, the government paid for and ought to have owned several large banks lock, stock, and barrel. Instead, officials carefully engineered deals to avoid ownership and control.

The real problem is that all the plumbers kids in the south bronx today are much less likely to have the same opportunity as Cooperman. If free markets were allowed function again wealth would distribute more evenly, and quite a few less people would need Cooperman’s charity. Crony capitalism is killing the middle class, and no Democrat or Republican seems to have any clue what to do about it.